WASHINGTON, June 19 (Reuters) - U.S. congressional leadersfailed on Tuesday to break a deadlock on a long-stalledtransportation funding measure, and Republicans may now have todetach from the bill approval of the controversial Keystone XLoil pipeline and find another vehicle for that project.

Removal of the pipeline provision would help clear the wayfor a short-term extension of current transportation fundingbefore a June 30 deadline.

House of Representatives Speaker John Boehner and SenateMajority Leader Harry Reid could not resolve differences in alate afternoon meeting over the road, bridge and rail bill thatcould create or save millions of jobs and give a lift to thestruggling U.S. economy.

"Hope springs eternal," Boehner, the top Republican inCongress, quipped as he left his office in the Capitol.

Failure to reach a deal in Congress could trigger layoffs ofnearly 3 million U.S. construction workers and increaseunemployment less than six months before the November elections.

Aides for House and Senate negotiators from both partiessaid hopes for a long-term funding bill were dimming and that asix-month extension was likely, with less than two weeks to gobefore the deadline.

But Republican House Transportation Committee Chairman JohnMica said Boehner and Reid instructed negotiators "to redoubleour efforts" and the Democratic-led Senate had offered a newproposal. He declined to comment on any discussions of atemporary extension, which would be the 11th since the mostrecent transportation bill expired in 2009.

"We're going to take it hour by hour, see if we can get thejob done," Mica said.

One major outstanding issue has been Republicans' insistenceon including approval for TransCanada Corp's KeystoneXL oil pipeline project - a provision opposed by PresidentBarack Obama and most Democrats.

The House lawmaker who authored that plan, NebraskaRepublican Lee Terry, now believes it is unlikely the Keystoneprovision will be part of a short-term, stopgap fundingextension.

"He doesn't see it happening at this point," a Terry aidetold Reuters, noting Terry continued to work with Boehner to seewhat other legislative vehicles could be used to advanceapproval for the Canada-to-Texas pipeline.

A Senate Democratic aide said the Keystone provision mighthave another chance to move if lawmakers complete a highway bill this summer or autumn.

"Even if it's a six-month bill, the possibility would existto do Keystone in the lame-duck (session), if not sooner," theaide said.

In negotiations with the Senate on core transportationprovisions, House Republicans have insisted on streamliningenvironmental reviews of road projects in order to speed uptheir construction. They also want to drop provisions that allowfor gasoline taxes to help pay for ancillary transportation"enhancements" such as flower beds and other streetscapeimprovements.

Earlier this month, Boehner floated the idea of a six-monthextension of current funding, which would remove the threat of ahalt in road and rail construction until after the Nov. 6elections.

Democrats have balked at that idea, saying it would depletethe Highway Trust Fund because falling gasoline tax collectionswere insufficient to fund current projects.

They say U.S. states also would delay the start of newlonger-term projects - and the hiring of hundreds of thousandsof workers - due to the lack of funding certainty.